Tuesday, October 23, 2012

It's that time of the year again. CRRA time. The call for entries for CRRA '13 is now open. For the uninitiated, CRRA stands for Corporate Responsibility Reporting Awards (or CorporateRegister Reporting Awards!) and it's the brainchild of CorporateRegister.com, the largest online directory site for Corporate Responsibility and Sustainability reports, numbering over 44,000 reports from over 9,000 companies to date.

CorporateRegister.com is the go-to place for reports and reporting information and is one of my absolutely favorite, and mostly used, sites.

This year, the contest is for reports published between 1st October 2011 and 26th October 2012 and profiled on CorporateRegister.com. There are also two important new changes for this year's format:

First: Change to the categories.

The SME category has slipped off the edge - which is a big shame - one of my fave categories and a sector badly in need of encouragement for Sustainability Reporting. I guess there are still too few SME's who are taking the plunge. But SME's can still enter the other categories.

There is a new category for Innovation in Reporting, designed to reflect new and creative practices "which may be adopted by other companies and help reporting evolve". Innovation can come in many forms - whether it be in structure or design, involvement of stakeholders, application of different guidelines and formats, infographics, new ways of presenting data and more. We are all seeking ways to make reporting more appealing, more accessible, more readable, more widely used and more impactful. Perhaps this category will help us get some new ideas for the reports of the future.

There is another new category - Best Non-Business Report - which is a very welcome addition and will enable not-for-profit organizations, government bodies or cities, universities or other academic institutions or trade associations - just about any organization that is not a business - to gain exposure. This is a great step forward, as non-business sectors have been slowly but steadily increasing their reporting output and there are some impressive reports around. Some of them are large organizations which, in addition to their often socially-oriented mission, must demonstrate accountability for the away they operate and the impacts they generate. Non-business reporters can also enter the other categories, but can now also compete in their own level playing field in this new category as well.

After checking that reports are relevant for the categories they have applied to compete in, all valid entries will be assessed for overall quality by a panel of academics, using the CorporateRegister.com proprietary ‘3C’ framework (Content, Communications, Credibility). Each report will be rated against this framework, irrespective of the categories the reports are competing in. The ten highest rated reports for each category will be short-listed. These reports will then be presented to voters using the online voting platform that we are familiar with from previous year CRRAs. The winners and runners-up in each specific category will be determined by this open online voting process.

This is very different from previous CRRAs in which all reports entered were directly open to the public for voting, generating 20 or 30 reports in each category, or more, clearly making it impossible to review all reports and provide a balanced vote. This way, voters can decide amongst the very ‘best’ reports, after an independent, objective and balanced short-listing process, using neutral assessors working within a structured framework. Voters will see only ten reports per category, which offers a manageable possibility of reviewing each report prior to making a selection.

I like this change, and while it will be disappointing for those not short-listed, it will probably offer a much more balanced competition.

As usual, CRRA will be maintaining a strict voting integrity mechanism which prevents people for voting for their own company and other multiple voting attempts which skew results. This is a strength of the CRRA platform and gives confidence that the final results are fair and representative.

Timeline

Entries are due for submission by 26th October. (Hurry if you are entering your report!) Voting will take place between November and January. The results will be announced at a Gala Evening in Spring 2013.

Published a report last year ?

If so, this is the time to seek some recognition. Reporting is not only a responsibility, it's an art. It's not just about reporting, it's about compelling communication. It's not about the winning, it's about the doing. But if you get to win, well, that's pretty inspiring. We can all learn from great reports.

Watch this space for a review of the short-listed reports as soon as they are public.

But I won't. I don't want to be accused of plagiarism. (Can you plagiarize yourself?)

Instead, I will give you10 reasons NOT to attend.

10: You don't want to hear from the top movers and shakers in the sustainability reporting world as you don't believe they can enlighten you with the most up-to-date information on the trends and issues that are shaping the reporting landscape as we move into another year and another reporting cycle. The world is not dynamic. Who needs to stay updated?

8: You have absolutely no interest in hearing Dr Steve Waygood, Chief Responsible Investment Officer, Aviva Investorstalk about the impact of sustainability reports on investor decision making and gaining a first-hand insight into what investors are looking for in your sustainability report. If they want it, your investors will tell you themselves, correct?

7: You don't read reports. You don't believe anyone reads reports. You can't imagine that there is enough to say about reporting for a whole day. You don't believe that over 6,000 reports are being published each year with numbers increasing every single year. You don't think that sustainability reporting needs to be smarter. You think it needs to be dead. Even if your company is producing a Sustainability Report every year, you don't see much mileage in understanding more about how to get greater value from reporting. You are happy lagging behind the crowd. Sometimes not knowing is much easier.

6: You can do without hearing from James Farrar, Vice President Sustainability, SAP on how to streamline information being requested from numerous stakeholders with varying needs. You are doing OK, producing numerous different reports in different formats at different times of the year and who cares if you have added another four people to your department to meet all this information overload?

5:
You don't see the point in engaging in a discussion with experts and peers about the implications of determining material topics. Materiality is such an easy thing. You just decide what you want to report about and call it material. The fact that the GRI is putting materiality at the top of the ladder in terms of determining content for GRI G4 reports, and this means materiality across the value chain and not just within the boundaries of your business, and the new Sustainability Accounting Standards Board (SASB) is creating materiality standards which they claim will revolutionize the way reporting happens and the way investors use reports, is not a sign that the entire reporting language and frames of reference are about to change. You don't see the need to invest in understanding materiality. You're happy faking it.

4: Why on earth would you give up a whole day to go to a conference where they don't serve ice cream? Come on. Can this be a serious event ?

3: You have no interest in learning about linking the on-line and off-line stakeholder engagement experiences from master-reporting-leader, Alberto Andreu Pinillos, Global Managing Director of Public Affairs, Telefónica. What's stakeholder engagement anyway? And on-line is more than it's cracked up to be. The fact that more companies are engaging with stakeholders in a range of online formats than ever before shouldn't be of concern to you. What you don't Tweet can't hurt you, right ?

2: You have no plans to be in London in February 2013, and your schedule is totally inflexible. Making room for one of the most interesting events on the sustainability reporting calendar in the UK in 2013 is absolutely impossible. You are overworked, overloaded, overtravelled, overconferenced and underbudgeted. Why change your plans for this one? The fact that you will gain cutting-edge insights, learn from best-in-class leaders, have an opportunity to reframe your thinking about sustainability reporting and related processes, and generally have a totally fun and productive day is not relevant. Just keep going into the office and doing what you're doing. That's ok. Ostriches manage to survive somehow (though some ostrich species are listed as endangered).

1: And finally, the number one reason not to attend the Smarter Sustainability Reporting Conference is that the 5th of February is your birthday and you make it a rule not to attend conferences on your birthday. Of course, if it is your birthday, I am sure that we can arrange a modest celebration (please let me know how many candles). But if it's a matter of principle, or you actually have something better to do on your birthday, then of course, you should not attend. Although all rules have exceptions.

If you found yourself identifying with any of the above reasons not to attend this conference, then I expect you won't be saying hi in February. Thankfully, the CSR Reporting Blog readership is quite an enlightened, open and curious crowd, so I am sure that at least 9 of the above ten reasons won't apply to you (number 4 is the weak link). I am optimistic that a bunch of you will want to attend, so I can offer you a discounted rate which you can DM me on twitter or email me to receive.

In the run-up to the conference, I will be chatting with some of the key speakers and introducing some of the themes of the conference in a series of blog posts to whet your appetite. Looking forward to seeing you in London in February! Please don't not attend!

Friday, October 19, 2012

Building on the obvious interest in G4, based on the fact that my post, The G4 Exposure Draft Explained, has become the most popular post ever! of the CSR Reporting Blog, with over 3,400 page views to date, I have decided to offer a more detailed review of the question of Application Levels, which if the G4 is approved as is, will fade away into reporting historical oblivion, never to be seen again.

The elimination of the A,B,C reporting levels system is controversial. One the one hand, there are obvious abuses of this aspect of the GRI Framework and it can be quite misleading. On the other hand, the competitive nature of what is perceived as a corporate sustainability ranking system may have galvanized organizations into higher levels of transparency and provided a roadmap for strategic sustainability performance development and reporting.

Much has already been blogged about Application Levels:

Rebecca Gunn, on the ACCSR blog, csrconnect.ed writes: "Most of us who have experience with the Guidelines agree that the existing Application Levels denoted as, “A, B, C” create a level of misrepresentation about the quality of the report or the level of performance of the organisation."

Robert Axelrod on the Fleishman-Hillard Sustainability Blog writes: “You don’t know what you’ve got till it’s gone.”, explaining that it's the Application Level A,B,C terminology that has created confusion and led to a tick-box mentality, and that a grading system of sorts would still be relevant. He adds: "Keep the Application Levels, but tweak them to reflect some of the great concepts found in G4."

I also posted on the hype of Application Levels and the way the coveted A or even A+ is abused for the purpose of making companies look good and reports look better than they are.

Feedback in the first GRI G4 Public Comment Period which asked for general input to the development of the G4 Exposure Draft contained some reference to Application Levels. Of the 691 individuals who responded to the question of how the Application Levels system could be improved:

89 respondents suggested that the naming of the Application Levels should be changed to remove the grade connotation that is generally linked to the letters A, B and C.

76 respondents were of the opinion that the current system works well and does not require any changes.

28 respondents said that fundamental changes were needed to the Application Level system and another 28 were of the opinion that GRI should get rid of it altogether.

25 respondents suggested that the number of levels should be increased and 16 suggested that a specific SME level should be added.

24 respondents were of the opinion that the Application Levels should be sector based.

This is a surprisingly small number of reactions to the Application Level system, and hardly a broad-based mandate for abandoning any form of differential application of the GRI Framework. Only 28 individuals suggested eliminating application levels and 76 said don't change anything. The GRI has now gathered in the feedback on the G4 Exposure Draft, and I suspect the Application Levels question will be one of the harder nuts to crack in the debate as to where the G4 final version will come out.

How many ladders? How many walls?

This debate is further complicated by the fact that G4 proposals promote reporting being tailored to material issues. Instead of being a one-size-fits-all framework as now, the new G4 option to select the most material issues and report only on those (what I am calling "material transparency") means that simply reporting on more stuff is no longer the target. Reporting on the right stuff is the new target. How can a differentiation system work when not everyone has their ladder up against the same wall? How do you assess the transparency and quality of a report when every company picks and chooses their own reference points? G4 does not prescribe a minimum, nor a maximum, number of material issues to report on. A company could select two material issues or thirty, making for a very different kind of report in either case. The GRI Sector Supplements, of which there are very few, having got lost in the general hubbub of GRI priorities, offers a partial response to materiality focus by sector. The new Sustainability Accounting Standards Board is taking the task of pre-defining material issues for a range of sectors into their own hands. But even so, material issues may be framed by sector-specific or geography-specific factors, but they can only ever be company-specific and time-bound to current issues that business strategy and stakeholder input determine. Back to square one. Sustainability Reporting of the future, according to G4, is a pick'n'mix job: "In Accordance" with general disclosures and "self-service" for material disclosures. The assumption may be that no-one wants to know more than the most important issues. But that's a big assumption.

There are three broad questions here:

Is there a need for some form of differentiation to indicate different levels of application of the GRI Framework or should it be a simple yes or no (as proposed in the G4 "In Accordance" approach) ?

If there is a need for differentiation, should A,B,C be replaced and if so, with what?

How does the question of materiality fit with the need for differentiation? Should Sustainability Reporting be limited to "need-to-know" transparency?

The Need for Differentiation

Let's face it, we live in a competitive world. We make comparisons. We love rankings. We strive to be the best, the leader, the role model, the top of the list. Sustainability Reporting is no different. It's another arena where competition between companies plays out and another channel for companies to demonstrate their prowess. Unless our entire economic system changes, this is not going to change. Companies will look for every opportunity to stand out from the crowd and to show they are better than the rest, or at least, no worse than the worst. Sustainability Reporting cannot ignore this. Arguably, one of the drivers for the spread of sustainability reporting has been this very thirst for competitive leadership and recognition. Without the A, B, C Application Levels, the rise of Sustainability Reporting may have been unremarkable and perhaps even a little boring.

The challenge arises in the area of differentiation when you try to separate sustainability performance from sustainability reporting. While there is some correlation, you can perform on sustainability and report badly. Or vice versa. The GRI Reporting Framework is about the integrity and quality of reporting, and the level of transparency demonstrated, not about inherent sustainability performance, and this is where the A,B,C has often been abused to create the impression that the company performance is top grade rather than its reporting of it.

It's not the system, it's the practice, that's problematic

What purpose, beyond beating your peers, does this differentiation serve? It does have a purpose. It's shorthand for a degree of transparency which corresponds to the sustainability issues that are generally accepted to be the ones that stakeholders universally find to be important. It's a snapshot of what you can expect to find in the report. It's a promise that the report will contain certain levels of disclosure. It's almost like a brand. A means full transparency, no holes barred. B means getting there. C means boarding the train. If applied correctly, and all reports actually did deliver the promise, and communications about the different levels were clear and honest, then this may actually be a good system. Those companies which raise the bar create a new standard for other companies to aspire to. This could continue to create momentum for reporting.

The problem is in the practice. The minute you define the groundrules, companies start to cut the corners to get more marketing traction and recognition for less work. Rather than using the Application Levels system as a driver for improved performance and reporting, it has been used primarily as a marketing tool with convenient workarounds for less convenient disclosures.

The G4 proposal has responded to the problems of Application Levels by deleting them. That's hardly a creative approach. Instead, the GRI G4 proposes the "In Accordance" threshold which requires all companies to do G4 or not, enabling only one aspect of differentiation. To be or not to be G4. I think this fails to respond to a market-driven need for broader differentiation, which I believe is a legitimate need for companies in competitive markets.

What to differentiate?

Should differentiation be around the level of transparency of the report? Or should differentiation adopt some other quality parameters? The "+" which has been used to indicate differentiation through assurance is not addressed in G4. There is no "In Accordance + " and assurance is not part of the minimum G4 threshold. There doesn't really seem to be any other basis for differentiation without getting into complications of how to compare report content. Differentiation on the basis, then, of transparency seems to be the only way to go. Transparency is a catalyst for performance improvement. Companies which report on material issues and disclose on other issues can gain some advantage, as certain stakeholders are interested in issues other than only those deemed most material, and companies can create value and opportunity from addressing issues which may not have hit the top of the materiality radar screen. Sometimes, public disclosure is what drives internal commitment and progress. Materiality, therefore, in G4, could be a minimum, not a maximum.

An option for not throwing the baby out with the bathwater

Accepting a greater need for differentiation might lead us to consider another option, which would first require lowering the "In Accordance" threshold to enable wider participation in G4 by all kinds of companies, including the smaller businesses. After all, GRI's mission is to increase the number and quality of reports published. Too high an "In Accordance" threshold will undoubtedly discourage small, new and possibly existing reporters. A lower "In Accordance" threshold should include a core set of disclosures and performance indicators that are truly universal and top priority. Something close to the current C level report of today, with about 25 predefined performance indicators. Beyond this, differentiation can happen. But how?

One option might be to use a percentage system. If the G4 has 73 Profile Disclosures, 44 Material Disclosure Aspects and 95 Performance Indicators, there could be a Percent Reported approach, which would include all the disclosures mandated by the lower "In Accordance" threshold. This could look something like this:

Company A: 132 of a total of 212 disclosures reported = 62% reported

Company B: 198 of a total of 212 disclosures reported = 93% reported

Company C: 107 of a total of 212 disclosures reported = 51% reported

Which company is the most transparent? Company B. Could this be confused with the quality of the company or its performance? Unlikely. It's a factual, not judgmental, grade. The problem here is that all disclosures carry equal percentage weight - though some are unquestionably more important than others. This could be addressed by the lower "In Accordance" threshold and its requirement for the minimum Percent Reported to include some of each of the different types of disclosure.

Minimum Materiality

This still does not address the issue of materiality. Reporting more stuff is not what G4 claims to be about. If transparency were the only common denominator, this system could work well. How do you factor in the materiality aspect into the differentiation system, when there is no prescriptive guidance for how many material issues to disclose? My response is this: G4 should prescribe that each company select a minimum of five most material issues to be reported on, and this should be part of the "In Accordance" minimum threshold. There is no company that has less than 5 material issues. Companies that wish to go for "Maximum Materiality" can still do so and gain points in the transparency league table.

Wrapping it Up

Thinking about Application Levels, Materiality, Transparency and Differentiation, I am led to conclude that G4 should offer a lower but different "In Accordance" threshold which is relevant for every company everywhere, in order to maintain the Sustainability Reporting momentum for all companies. I conclude that differentiation is a good thing and a differentiation mechanism should be available for companies who can and wish to disclose more than minimum, for various internally or externally driven reasons, leveraging it for competitive advantage while establishing new standards that other companies may follow. The Go-No-Go G4 proposal is unimaginative in this respect and could become a blocker for more and better reporting in the future. The option proposed here is just one suggestion. I am sure there are other possibilities, probably better ones.

Place your Bets

As the GRI Governing Bodies battle this out between now and the May 2013 launch of G4, we can try a little poll of our own. Click to vote.

This Report is a sequel to the very successful first 2009 Embedding Report, which I blogged about in 2009. With Judy at the helm, I knew this would be another great publication. Judy is an independent sustainable business expert with over two decades of working with companies on sustainable
development, corporate responsibility and strategic communication challenges.
She was previously Director of Client Services at SustainAbility, founding director for
the Global Reporting Initiative, and Corporate Programmes Director at the Ceres
coalition.

Embedding is as much of a challenge today as it was back in 2009. The report notes: "Embedding CR in business demands a thoughtful process to ensure CR awareness,
tools and thinking are present and active in normal company operations, and not a
bolt-on or afterthought." I think it goes even beyond "active and present". CR has to be completely and fully integrated into every action by every employee both on and off-duty, in order for all stakeholders to gain optimal benefit. It is the lens which colors every decision, the basis for every interaction and the inspiration for every business solution. That might sound a little poetic and Utopian, which may be somewhat of a break from my usual informative and factual style (yes, I am ambidextrous), but the more I work with organizations, the more I realize that, just as CR is all-encompassing, so Embedding must be all-encompassing also. Employees need to connect with CR thinking and approaches at many different levels. I was recently discussing the benefits of engagement with investors with a large, global client, who is well advanced on the CR road and has a very credible record. The company's investor relations communications, however, make no mention of CR. The company is embedding CR internally but failing to leverage it externally. I can count numerous examples of similar situations where CR is working in one part of a business but not in another. This is all about Embedding. This is about ensuring that CR is the baseline, everywhere, in every function, in every interaction. That's why this 2012Embedding Report by Ethical Corporation is timely, relevant and serves to offer insights for companies on how to Embed better.

The Report is structured in three parts:

Part One: Embedding Activities: this includes aspects such as identifying the issues, engaging with stakeholders, making the business case, setting goals and targets, developing a roadmap and communicating CR.

Part Two: Case Studies: this includes fabulous insights from GE, IBM, M&S, Petrobras and Unilever.

Part Three: Embedding CR in Corporate Functions: This includes a deep-dive into different functions such as governance, R&D, Value Chain Management, Human Resources and looks at internal processes and community involvement and ends up with a set of conclusions and recommendations.

I have picked 20 insights that I found to be refreshing, reinforcing and valuable from this report, in no particular order and in no particular hierarchy of importance. Just things I found worthwhile repeating. The following TWENTY insights are all quotes from the Embedding Report.

ONE: In an Ethical Corporation survey, 93% of companies recognize the value of embedding CR into business processes yet only 49% of companies confirm that CR is a clear component of overall company strategy, and 49% or companies do not believe that they understand what is necessary to do to embed CR into their business.

TWO: Embedding requires a simultaneous top-down and bottom-up approach
– to ensure consistency and shared values at the same time as local ownership of
issues and impacts.

THREE: Healthy stakeholder relationships can provide a rich source of
ideas and enthusiasm that can help tap your company’s innovation potential. They
can help you gauge changes in company direction or product offerings. And if
relationships are authentic and responsive, stakeholders can help protect your
company’s reputation and licence to operate during difficult times.

FOUR: Companies that successfully embed CR in their business practices know that the
toughest critics are often internal.

FIVE: Corporate responsibility requires communication throughout the process – with
different audiences, for different purposes, using different tools. CR communications
can help to bridge the divide for colleagues and management, helping them
to understand and feel part of the CR agenda.

SIX: While much effort has been spent on corporate-level sustainability communications,
there are many different things stakeholders – internal and external – want
and need to understand about sustainability performance. One recent example is
the rise in product-related sustainability information. General Motors’ Chevrolet company has instituted a product eco-label, debuting in North America throughout 2012 on the company’s vehicles. Dubbed Ecologic, the label is intended to put clear and substantiated product sustainability information in the hands of consumers where they need it most – the showroom floor.

EIGHT: Don’t neglect commercialisation considerations; sustainable R&D needs to be
married up with marketing, so make sure you anticipate challenges in introducing
more sustainable products into your mainstream product offering, and
capitalise on the knowledge and experience of marketing professionals to
guide your efforts.

NINE: A company’s sustainability risks and impacts – and its CR potential – may be closely tied to its activities up and down the value chain. Working with raw materials
sourcing, contract manufacturing, logistics, distributors and customers can greatly
increase your control over your CR objectives. For an increasing number of industries,
such value-chain activity is essential to meeting consumer needs, reducing
risk and expanding opportunity.

TEN: According to Elaine Cohen, author of the book CSR for HR – a guide to embedding sustainability through the HR function – “The two
aspects of human resources management in sustainability are: how does HR
contribute to a business becoming sustainable, with the help of tools and
processes that the HR function owns; and how does the HR function itself manage
itself sustainably?”
In other words, HR is both an agent for implementing a traditional sustainability
programme within a company, and as a corporate function is itself subject to
corporate responsibility issues, via their role in identifying, hiring and integrating
people into the corporate structure.

ELEVEN: Often, the most important first step in incorporating a CR perspective into your
operations is to understand your baseline performance against key criteria, though
complex global operations and disparate supply chains can still render this analysis
exceptionally difficult.

TWELVE: Immediate neighbours or “fenceline communities” are often what companies think
of first when they think of CR in the community. Local people in the towns, cities
and settlements where companies are active and have a presence are among the
most immediately affected by company operations. ... Especially in areas of lower economic and social development, a company’s
presence can have an enormous impact on local people and society.

THIRTEEN: Companies should be aware of the role of social media in giving voice to stakeholders,
including local communities. Social media allows groups – even small
community groups – to extend and magnify their messages, reaching much more
influential audiences than they might have otherwise.

FOURTEEN: Consider how NGO partnerships can help you meet community needs and
aspirations while making use of your core strengths and position as a business.

FIFTEEN: Corporate responsibility can get pretty complex at the best of times – what with
complex scientific aspects such as biodiversity, cultural and managerial practices
such as human rights, and issues that span the technical and political such as water
use, it’s inevitable that there will need to be some specialisation.
... Colleagues in nearly all parts of the business need to have some basic
shared understanding and commitment to ensure that all the disparate parts come
together in the end. CR cannot be seen as the responsibility of the CR function.

SIXTEEN: The way to do it, as the adage says, is “a bite at a time”. Some sustainability
challenges can seem so immense and overwhelming that people – and companies
– can find themselves tuning out in despair, or minimising the scale of the problems
as a means of rationalising their failure to solve them.

SEVENTEEN: Setting and delivering on targets requires a fuller implementation plan – a road map
– to bring together a clarification of the company’s objectives with the physical,
financial, human and intellectual resources required to get there.

EIGHTEEN: Green lens: Looking at the business through a different “green lens” means people
spot new opportunities to reduce impacts and costs by less obvious means. (M&S Case Study)

NINETEEN: There are clear and growing examples of board and executive failures to meet
stakeholders’ expectations on CR issues, which may sometimes come as a surprise
to the companies involved. From allegations of nurturing a culture of risk-taking to
the excessive executive pay packages that were the target of the “shareholder
spring” of 2012 annual meetings, many boards appear caught out by stakeholder
expectations.

TWENTY: Achieve a few early CR successes, and you might be excused for wanting to rest on your laurels. But CR isn’t something that can be “done” and left on a shelf – it’s a
continual part of risk management and market creation.

Great gems of wisdom and advice, and nuggets of thought which lead to action to Embed better. Ironically, the report closes out with the statement: "Perhaps the larger goal is to stop doing “corporate responsibility” in favour of just
doing business." Here we have the Catch 22: One the one hand, we need to retain focus on CR in order to ensure that "just doing business" doesn't mean business which is inequitable, lacks accountability for social and environmental impacts and makes short-term profit the main goal, while on the other hand, we need to embed CR to such an extent that it is so well integrated in everything a business does that it's barely noticeable. That's the challenge. Embedding without the join showing. Not many companies have achieved this yet.... but there are a few en route, such as those identified in the case studies in the Ethical Corporation Report "How to embed Sustainability and Corporate Responsibility in Management Processes." If you are struggling to embed without the join showing, this report offers many more insights that the twenty I have shared.

While you are thinking about that, my next mission is to embed some ice cream. The challenge is to do that without the join (calories) showing. Perhaps CR is an easier option after all.

Thursday, October 4, 2012

"Valuing your Trust" is the title of the first local CSR report of GSK Romania, a report which conforms to Application Level B of the GRI framework, and which was launched this week at a well-attended press conference in Bucharest. At a time when trust in business is often thought of as an oxymoron, GSK Romania has gone public with a very clear statement on what it means to be a business which is worthy of trust. Pascal Prigent, General Manager of GSK Pharma in Romania, explained in his opening remarks to the press: " In order to survive, businesses today need to work in collaboration and partnership, and strive to create shared value, so that they can deliver economic and social benefits simultaneously. Trust is an essential ingredient of survival."

If transparency is a demonstration of trust, then GSK shows leadership as the first local pharma company to publish a CSR Report and also the first Romanian company to become an organizational stakeholder of the GRI. This is highly significant in a market in which very few companies have ventured to report on Sustainability: the GRI Sustainability Disclosure Database shows only 6 companies that have reported using the GRI Framework (5 at Level C and one at Level B), while CorporateRegister.com shows thirty reports published in Romania by just seven companies between 2006 and today.

In this first report (Disclosure: I was GSK Romania's reporting consultant and assisted in writing the report) which is available for download in English and Romanian here, GSK Romania explains the ways in which this significant local pharma player is building and sustaining trust with local stakeholders, including regulators, customers, patient advocacy groups, community associations and of course, employees.

GSK in Romania is comprised of four different entities a Pharma company, a Consumer Healthcare Company, a Distribution business (Europharm) and a Manufacturing Operation which exports to over 80 countries. In Pharma, GSK Romania delivers innovative medicines and vaccines in 13 therapeutical areas, with over 2,000 vaccines per day being administered, and distribution of products to over 6,000 Points of Sale throughout the country. The entire GSK operation in Romania employs just over 1,000 people and is the most diversified pharmaceutical business in the country, and the only pharma company to manufacture innovative drugs locally. GSK Romania aligns with GSK's global mission to improve the quality
of human life by enabling people to
do more,
feel better
and live longer, while making this specifically relevant to Romanian stakeholders by adding the objective to contribute to increasing the life expectancy of the Romanian people which is currently the lowest in Europe, and to support the transformation of the healthcare sector in Romania which suffers from a weak political leadership, under-budgeting and many problems which restrict access to medicine. GSK Romania is a major contributor to the state budget, with EURO 75 million paid in taxes during the last 2 years.

Some highlights of the GSK Romania CSR performance over 2011:

EURO 719,940 invested in the community in Romania.

EURO 29,000 provided to support 11 Patient Associations.

Over 3,000 hours in employee training.

Developing Romanian professional talent: six GSK Romanians are working in management GSK roles abroad.

40% reduction in carbon emissions per ton of product delivered.

23% reduction in manufacturing waste.

Absolute energy consumption reduction of 7.5% in manufacturing, despite 9% increase in output during the same period.

68% of employees engaged in volunteering in the community with over 6,000 volunteer hours.

Main community partners: Save the Children Romania, United Way, Save the Delta and Danube Association, Habitat for Humanity, and Hospice Casa Sperantei. One example of an inspiring community partnership is with Save the Children in a five year plan to reduce child mortality
in Romania with a new programme called “Every Child Matters”. Over 600
children and 400 pregnant women were supported by this programme in 2011, in
16 rural areas of Romania.

It is always a pleasure to work with an organization that oozes passion and commitment to a more sustainable future, and my experience with GSK in Romania is of a company built of individuals who live the value of trust and are working hard to improve perceptions about the pharma industry by putting patients first and creating new standards of ethical behavior in the sector in Romania.